News & Noteworthy

Authored - NJ Contract Law Update - Seller Overcomes Missing Documentation to Recover for Goods, Special Orders, Finance Charges, and Attorneys Fees, But Not Collateral Storage Charges
APRIL 11, 2013 | Windels Marx - Commercial Litigation

H.H. Hankins & Bro. v. Edgewood Properties, Inc., ____ N.J.Super. ___, 2013, WL 1092134 (N.J.App.Div. March 18, 2013), involved the prosaic issue of unpaid invoices for construction goods delivered. The interesting elements of the case were as follows:

  1. The seller was able to prove delivery of the goods even though the driver failed to preserve the "signed original delivery receipt". In effect, the Opinion implies that the Court felt the buyer was aware of the delivery--and was being less than sincere about whether the delivery occurred or not. As an interesting practice tip, beyond the testimony of the delivery, there were photographs taken, presumably showing the goods on site.
  2. "Special order goods" were also among the recoverable items, under the doctrine of promissory estoppel. The Court also noted that there was detailed proof about reasonable mitigation of damages, which reduced the total claim by over three quarters.
  3. A finance charge repeatedly referred to in the contract documents--but quantified only at the inception of the credit process--was sufficient to establish the specific finance charge of 1.5% per month. The trial court erred in not considering additional prejudgment interest on the special order items.
  4. The trial court erred in applying consumer attorneys-fees limitations to commercial transactions.
  5. The defendant was not aggressive enough in pursuing specific discovery about damages beyond the original "demand for damages", at which point it was too early for plaintiff to have that information. Thus, the detailed evidence at trial about damages was permissible.
  6. Since storage fees were neither in the contract nor adequately proven as consequential damages (semble), they were not recoverable.

The moral of the story is that a litigant should not underestimate the power of both credibility and invoice terms, regardless of what may have been signed or not. A secondary moral is that despite success at the trial level, one should not hesitate to appeal for more complete relief where additional items such as interest and attorneys fees might have been on the various stocking levels of the special goods, and not just the final balance thereof) might be quite substantial.

Contact & Legal Disclaimer

Clark Alpert is the author of Guide to New Jersey Contract Law, published by the New Jersey Institute for Continuing Legal Education, originally published in 2007 and updated in November 2011. His updates on New Jersey contract law are based in recent issues and practical methods for addressing similar situations in your practice or business. They are not intended to serve as legal advice. Clark welcomes your questions and comments.

Windels Marx helps you harness opportunity and mitigate risk with a team that provides your business with the service, quality and value essential to a trusted relationship.